The PRESIDENT
- Far too many interjections are being made. Honorable senators are aware that interjections are disorderly, and that Senator Shannon has the right to put his views before the Chamber without interruption.

Senator SHANNON
- I thank you for your protection, but I do not mind interjections so long as they do not draw me too far from my subject.

Senator Long
- I wanted to convey the impression that the honorable senator and his party were not influencing Labour legislation at all, but were simply following Labour's lead.

Senator SHANNON
- I do not follow that interjection either. If the honorable senator exercises his privilege as an Irishman of speaking until he is understood, I think he will have to speak for a long time. I am sorry the offer of the Leader of the Opposition was not accepted in the spirit in which it was made. Honorable senators who have spoken to the question from the other side have adopted a standauddeliver attitude. They practically say, " We are going to have what we want, no matter what you on the other side may say." If that is the attitude to be adopted by the Government and their followers, I do not mind, so long as we and the public know it. We shall know exactly where we are. I am always ready to take my own part, and if I do not agree with the Government I can raise my voice against their proposals.

Senator SHANNON
- The n I am to understand that there is to be no political truce whatever, simply because the Labour party have a majority in both Houses, arid do not care a hang for the war or for us or anybody else, so long as they can carry out their programme? Very well, then, let the people of Australia know it. That is a stand-and-deliver attitude. It is the spirit of the highwayman; but is it the real patriotic spirit that ought to be shown at this juncture? Is it the spirit animating the people at a time when one cannot get half-a-dozen individuals anywhere in Australia to talk about anything but the war, with perhaps a word or two about the drought?

Senator SHANNON
- I shall have a few words to say to the Honorary Minister on that subject. I regret that Australia generally is suffering from the double affliction of the war and the drought. We have had a war with the elements which has given our legislators in the Federal and State Parliaments the very gravest concern. I do not wish to cast the slightest reflection on the Prime Minister for alluding to it as a little drought. Probably he was trying to produce in the minds of the people generally the feeling that the drought was not so severe as it really was.

Senator SHANNON
- Probably the words were used by him in that sense, because I give him credit for knowing better. Unfortunately, the drought throughout Australia to-day is so severe that every other in our history pales into insignificance. When I reckon up its effects I have not the slightest doubt that it will take Australia at least ten years to recover from it. Probably by that time we shall have experienced another drought. I " know that in Australia to-day there are a great many people who believe that >i' is possible for meteorologists to make accurate weather forecasts for periods of from ten to fifty years ahead. But does it require a meteorologist to do that ? Yon , sir, who have had a considerable experience of Australia, know full well that one has merely to look at the history of this continent - and history has an unfortunate knack of repeating itself - to realize that at some period between 1922 and 1925 we shall be again visited by drought.

Senator Ready
- We sincerely hope that the history of the last Senate election in. South Australia will not be repeated.

Senator Long
- The honorable senator is not as bright to-day as he usually is.

Senator SHANNON
- The interjections of my honorable friends are not so pertinent as they usually are. They merely strike the surface of one's argument and glance off. Thev lack penetration. But I desire specially to address a few words to the younger members of this Chamber. I do not ask them to take particular notice of my statements, but I do urge them to indulge in a little research for themselves - to think for themselves

Senator SHANNON
- And not to be misled. We all know that in 1902-3 we experienced a severe drought, and that the years 1912, 1913 and 1914 were also years of drought, or, at least, were years in which we lacked the normal rainfall. We may, therefore, conclude with reasonable certainty that droughts will recur at fairly regular intervals. Consequently it behoves the younger members of the Senate to take warning from our past experience, and to make provision to obviate the suffering which Australia will otherwise sustain when similar droughts again overtake it. There are only two ways in which such provision could be made. Water conservation is the prime necessity of this country, and it is incumbent upon us as legislators to make as much provision as possible for conserving the natural rainfall, because the quantity which goes to waste in normal years is ample to provide for the entire requirements of the Commonwealth in adverse years. It is our bounden duty, therefore, to go in for a system of water conservation by which we can be safeguarded against periodical droughts.

Senator Needham
- This is a lecture which should be delivered in the State Parliament.

Senator SHANNON
- But we can do something in the matter. I am glad to know that the Government propose to grant the sum of £1,000,000 towards the locking of the River Murray.

Senator SHANNON
- That is so. I am not a member of the South Australian Parliament, but probably my words will reach the Parliament of Western Australia through the medium of the honorable senator, and if so, my speech this afternoon will not have been in vain. I say that down the River Murray sufficient water annually runs to waste to prevent Australia from ever lacking a supply of this precious fluid if that waste were properly conserved. What is the other duty with which we are faced 1 Obviously it is that, like Joseph of old, we should store up sufficient in the years of plenty to tide us over the years of adversity. That is the only way in which we can guard against drought. I hope that the older members of this Chamber will endeavour to 'give effect to some such policy, because ten years hence probably I shall not be here. During the course of his remarks on this motion, Senator Lynch called upon me to indorse his statement that the present Government are the true friends of the farmer, inasmuch as they have removed the duties upon fodder. If that simple act would brand them as the friends of the producer, I, as a farmer would say, " Good luck to them." But has the suspension of the fodder duties assisted any farmer in Australia even in the slightest degree? Certainly not I There is not a farmer who has benefited by the suspension of those duties to the extant of a brass farthing.

Senator Russell
- That is sheer nonsense, because the suspension of the duties enabled the farmers in this State to be supplied with cheap imported seed wheat. It enabled the farmers to get their wheat ls. per bushel cheaper than they otherwise would have done.

Senator SHANNON
- Only one shipment of wheat has been imported into Victoria-

Senator Russell
- Did the honorable senator ever know a Victorian Government to import wheat like that for seeding purposes? He ia on the wrong side - the side of bad wheat.

Senator SHANNON
- I repeat that the farmers of Australia have not benefited by the suspension of the fodder duties. In the bad season like that through which we have just passed, those farmers who had given large orders for bags suddenly found that a 10 per cent, impost had been levied upon" all jute goods. Was not that helping the- farmer with a vengeance? As a matter of fact, the position to-day is that some farmers have not only had to pay an extra tax upon their bags, but have had to borrow the money with which to purchase them, and will also have to pay interest upon that borrowed money until next year before they will have an opportunity of filling those bags. Similarly we find that the farming community is being mulcted in a sum of £300,000 per annum by reason of the duties upon agricultural implements and machinery.

Senator Russell
- On imported machinery, the rate is not high enough. Why do they not use Australian machinery ?

Senator SHANNON
- Practically a third of a million pounds per annum :s a very severe impost to levy on the farmers of the Commonwealth in this co (1nexion. If there is any industry in our midst which ought to be fostered it is the producing industry. All possible restrictions should be removed from it, and every encouragement should be offered for its expansion. The one great word in Australia should be "Production." That should be the foremost word of every Government; whether it be State or Commonwealth. If ' that ia the attitude of a paternal Government to the producing interests. I think that the farmers will say, " Lord, save us from our friends."

Senator Russell
- Do you think that the farmers should be exempt from all war taxation ?

Senator SHANNON
- The Minister should hear the farmers squealing about the duty on bags. If the news has not reached the ears of the honorable senator, I may tell him that this morning I was informed that 3,000 odd farmers in South Australia are sending in a petition against the imposition of such an unjust duty as 10 per cent, on bags.

Senator SHANNON
- Who is going to pay the price of Dundee bags? If the farmers are called upon to put wheat in such bags, the sooner we have bulk handling the better. Wheat bags are not made in Australia, and we cannot even grow the material to make them from. Senator O'Keefe wanted to know why Australia, having produced 50 per cent, more wheat last season that it did in 1902-3, the price should be so much higher to-day than it was then, and he suggested that there is a secret human agency at work to bring about such a result. I do not know why, as soon as a commodity gets a little scarce or begins to rise a little in price, honorable senators on the other side should always raise the cry that there is a ring, or combine, or trust in operation to bring about that result. I have a suspicion as to such honorable senators being truly honest in their remarks when they exhibit so much suspicion as they do. What is the position in reference to the wheat business in Australia to-day, compared with the position in 1903? It is well known that in 1903 we had an abnormally light crop, realizing only 12,378,068 bushels. We cannot get the whole of the figures for the last crop. The production in Victoria was estimated at 4,084,865 bushels, and the crop yielded 3,940,947 bushels. In South Australia the production was estimated at 4,664,761 bushels, and the crop yielded 3,527,428 bushels. In Western Australia tje crop was estimated to yield 3,272,330 bushels, and the crop yielded 2,700,000 bushels. In those three States alone there was a deficiency of 1,853,581 bushels in the yield. In New South Wales it was estimated that there would be a yield of 15,700,000 bushels, in Queensland 1,486,419 bushels, and in Tasmania 371,229 bushels, making a grand total of 17,557,648 bushels. Taking the figures for the three smaller States, where the crops were light, there is a deficiency of nearly 2,000,000 bushels. I shall be quite within the mark in saying that the yields in those States will fall 3,000,000 bushels below the estimated yields, and if they do, that will only give us a yield of 14,557,648 bushels from three States, which, added to the production of 10,168,375 bushels in the other States, will give a total yield of 24,726,023 bushels, whereas in 1902-3 the yield was only 12,378,068 bushels. That 'is an "increase of 100 per rent. Yet we find that, whereas in those days wheat was only' 5s. 6d. or 5s. 7d. a bushel in Australia, it is worth about 8s. a bushel to-day. For seed and flour, Australia requires approximately 37,000,000 bushels of wheat. As there is a deficit of about 12,300,000 bushels, and the carryover from last year was about 7,000,000 bushels, it will be seen that, to continue operations in the coming year, we require at least 5,300,000 bushels. In 1903 t:he yield was only a trifle over 12,000,000 bushels, and 9,114,490 bushels were imported. By whom - by the Governments of the States or by the Federal Government? No. By the trusts and combines - by the "exploiters" of the people whom Senator Lynch sometimes denounces with vitriolic vehemence. Those " despoilers " of the people brought that quantity of wheat into Australia at an average cost of 4s. lid. a bushel, and kept the price here on a fairly equal basis. The highest average price ruling in the European market in 1903 was 26s. 9d. a quarter, while the highest weekly average was 30s. 3d., or less than 4s. a bushel in the world's market, when Australia raised only 12,000,000 bushels.

Senator Pearce
- What is the price of wheat in the world's market now?

Senator SHANNON
- I am sorry that Senator O'Keefe is not in his place, because lie desired to know, why wheat is so dear to-day in Australia, when it was so much cheaper in 1903, although we produced very much less wheat then. It is because the world's market rules the price. What is the world's price to-day? It is from 64s. to 66s. 6d. a quarter, or from 8s. to Ss. 4d. a bushel. We hear that wheat cannot be imported into Australia now at less than from 8s. 6d. to 9s. a bushel. It is- a very pertinent question for my honorable friend from Tasmania to ask why have not Australian merchants introduced wheat to-day. Because of the tinkering with the price by some of the State Ministries, they have been afraid to import, knowing that if they did, it could be commandeered at less than the cost price. It is for that reason that the merchants have refrained from introducing any wheat up to the present time. I do not know that any merchants will import under existing conditions, but wheat has to be imported by somebody to the extent of at least 5,300,000 bushels to meet the actual requirements of the Commonwealth, and there must always be a certain amount of carry-over. It may be said that at least 7,500,000 bushels will have to be imported, and there is a suggestion that the actual figures will fall very much below those which I have quoted. One State in Australia claimed that it was going to control the wheat business by fixing the price. I would not say so much about this matter, only that I think it ought to be an object lesson to honorable senators on the other side. I notice that the Attorney-General, Mr. Hughes, has said that it is a striking illustration to show that the Federal Parliament can fix prices, but in my humble opinion it has had the very opposite effect. The commandeering of wheat by New South Wales at 5s. a bushel only helped to get over a very small difficulty. Had there been enough wheat in the Commonwealth to meet the whole of the Australian requirements at 5s. a bushel, mid had that price been fixed-

Senator Pearce
- Australia wants 22,000,000 bushels, and has 17,000,000 bushels. Suppose that you seize the 17,000,000 bushels at 5s. a bushel, and import 5,000,000 bushels at 7s. Would not that be better for the people, rather than that the price of the 22,000,000 bushels should go up to 7s.?

Senator SHANNON
- In New South Wales the wheat was seized at 5s. a bushel, and to bring the same quantity to Australia to-day from the world's market would cost 3s. 6d. a bushel more. In other words, enough wheat for the requirements of New South Wales would cost at least another 3s. 6d. a bushel. Wheat cannot be imported now at less than Ss. 6d. a bushel.

Senator Pearce
- Victoria is introducing wheat to-day at less than that price.

Senator Pearce
- And let the wheatowners ship the wheat away from the State.

Senator SHANNON
- No. During last year a Royal Commission sat, and recommended to the various States that no wheat or flour should be shipped out of Australia. I am sorry that the recommendation was not taken notice of, because it emanated from three of the finest men in the Commonwealth, namely, Mr. Deakin, Mr. Dugald Thomson, and Mr. Knibbs. The recommendation of those gentlemen ought to have been given effect to, because when they realized that there was a sufficient quantity of wheat and flour in Australia for the consumption of the people, it was a suicidal policy for any Government to allow wheat to be exported. It was really a case of starving our own people. But that does not get over the position of the State Government having seized a certain "quantity of wheat at 5s. a bushel. Considered from any stand-point you like, it was an act of legalized robbery, done, not for the benefit of the whole of the people of the State, but for the benefit of a section.

Senator Gardiner
- When the State Government seized the wheat they gave 3d. a bushel more than the market price, which was 4s. 9d.

Senator SHANNON
- I am sorry the honorable senator cannot see the distinction between the two transactions - between that of a man who sells volun tarily, and the stand-and-deliver attitude I have referred to.

Senator Pearce
- The farmers would have sold all their wheat before the rise took place.

Senator SHANNON
- On a rising market there is no farmer in Australia who could not hold his wheat.

Senator Gardiner
- In the ordinary course of events 95 per cent, of the wheat would have passed out of the hands of the farmers before any rise took place

Senator SHANNON
- I say that on a rising market there is not a farmer in Australia who could not afford 'to "hold his wheat. It is a different thing when the market is falling. The commandeering of this wheat was like the action of Robin Hood, the greatest robber in English history.

Senator Long
- Does not the honorable senator know that the majority of wheatfarmers in Australia realize on their wheat as soon as it is available?

Senator SHANNON
- I repeat that on a rising market there is not a farmer in Australia who would not hold his wheat.

Senator Pearce
- My experience is quite different to that quoted by the honorable senator, and in the same part of South Australia as he comes from. The farmers are always ready to sell their, wheat as promptly as possible.

Senator SHANNON
- They do it because they are speculators, and that is a trait of Australian character. The action of the New South Wales Government in seizing the wheat prevented the farmers from obtaining the open-market price.

Senator Gardiner
- And the people of New South Wales are to-day getting bread at about 2W. per 4-lb. loaf cheaper than in Victoria.

Senator Bakhap
- It is lOd. to ls. per 4-lb. loaf in some Darts of New South Wales.

Senator Gardiner
- That is not correct. Application has been made for permission to raise prices.

Senator SHANNON
- The Government of New South Wales commandeered the wheat at 5s. per bushel, and in order to maintain supplies they have now to go into the world's markets, and pav 8s. 6d., so that, instead of New South Wales reaping a benefit, the burden has to be borne by the farmers who have been denied the opportunity of gettin? the market value for their product. As a matter of fact, they have been robbed of a certain percentage of their earnings, and a benefit has been conferred upon American farmers. Even if the merchants had made a profit over the wheat position in Australia, it would have been better than bringing about the present position, which has benefited the foreign producers of this product.

Senator Watson
- But we cannot fix prices. We have not that power. We are seeking it.

Senator SHANNON
- I know that the honorable senators want power to fix the prices.

Senator SHANNON
- It is a very simple matter for the Government to fix prices on a rising market, but if they are to be honest they ought also to fix the prices on a falling market as well, and this can only be done at the expense of the general taxpayer.

Senator SHANNON
- I am not a speculator at all. God forbid that I should stand in ray place in the Senate and put up a case for any one section of the people in Australia. Whenever you find J. W. S. standing upon the floor of the Senate and doing that, he will resign his seat.

Senator SHANNON
- I defy the honorable senator to put his finger on any action or speech of mine, either in this Parliament or in the Parliament of South Australia, the object of which was to benefit any particular section of the community.

Senator Watson
- You are on the wrong side. Surely you are arguing against your own tenets.

Senator SHANNON
- No, I am not; but I put it to the honorable senator who has interjected that if Parliament is to give the Government power to fix prices when they are ascending, as they are to-day, the Parliament should also give power to regulate prices when they are falling.

Senator Bakhap
- They only want to regulate prices in a downward direction.

Senator SHANNON
- I sincerely trust senators will give this great question very serious consideration before they ask the people of Australia to give the Government power to fix the prices when the effect of this course is as I have shown it to be.

Senator SHANNON
- No. If it can be proved to me that there is any combine or trust in Australia working injuriously to the people of this country, honorable senators know full well that they will have, not only my voice, but my vote, in favour of controlling that monopoly.

Senator READY (TASMANIA)
- Well, we shall see what will happen to you when the referendum comes before us.

Senator SHANNON
- If the honorable senator and members on that side will ask the people of Australia for only those powers which are required for the Federal Parliament of Australia, they will find me helping them; but they cannot expect my assistance when they are seeking powers far greater than are required.

Senator Ready
- You are like Sir William Irvine - speaking one way and voting another.

Senator SHANNON
- I am very sorry for the ignorance displayed by the honorable senator who has just interjected, because he cannot see the difference between asking for what we want and asking for a great deal more than we require.

Senator Ready
- But Sir William Irvine said that there was no half-way house; that we must have all the power; and he added that, because the Labour party were in office, he would not give us this authority.

Senator SHANNON
- I have given my reasons why I opposed the course suggested. If there are certain powers required for the restriction of combines that are working injuriously to the people of Australia, I will do everything in my power to help the Government to get them.

Senator Ready
- But your party told the people of Tasmania that there were no trusts.

Senator SHANNON
- Yes; but the honorable senator and his party have not been able to show that there are any trusts working injuriously to the people of Australia. There was the Sugar Trust or Combine, as it was called - the " C.S.R.," to which reference was so often made - but it was shown that it was not working injuriously to the people of this country.

Senator Ready
- The Inter-State Commission stated it was. Have you read its last report?

Senator SHANNON
- Yes ; and I cannot read into it the meaning attributed to it by the honorable senator, and I am too old now to go to school and learn what the English language means.

Senator SHANNON
- If the English language does not mean what I think it does in the case of the Commission appointed to inquire into the Sugar Trust, then all that I can say is that Commissions are not worth the room that they occupy. The Sugar Commission was hawked all over Australia, and what was the result of the inquiries ?

Senator Ready
- It said that there was a trust, and recommended the passage of legislation to control it.

Senator SHANNON
- The honorable senator should read the report of the Commission again.

Senator Gardiner
- No; you read the evidence. The president of the Sugar Company, in giving evidence, did not deny the fact that the company had given £50,000 to defeat the referenda proposals.

Senator Bakhap
- The object of the referenda was "to destroy his business.

Senator SHANNON
- Even if the business of the Sugar Company were nationalized, the people of Australia would not get their sugar any cheaper than today. That is shown in the recommendation of the Commission.

Senator Ready
- No; it is not. The Commission advocated regulation of the prices and an alteration of the Constitution to obtain that object.

Senator SHANNON
- The honorable senator ought to be ashamed of himself to make that statement. Then there was the so-called Beef Trust, which was another bogy.

Senator SHANNON
- The report stated that there was no such thing as a Beef Trust. It has been shown that meat and wool in Australia have been at high level for the last ten or fifteen years, and that the upward tendency has been due to the extreme drought from which Australia has been sufferinsr for so long.

Senator Gardiner
- There has been no drought in the Queensland cattle country, and in spite of that the meat went up.

Senator SHANNON
- Yes; that was because meat supplies in Australia had become scarce.

Senator Guy
- What is the cause of the enormous increase in the export trade ?

Senator SHANNON
- Because by exporting they can get more for their meat than the southern States are prepared to pay them. I shall shortly direct the attention of honorable senators to a part of Australia to which Senator Newland referred in speaking on this motion. I commend the honorable senator for the way in which he brought the claims of that Federal Territory before the notice of the Senate. I have a few words to say upon the introduction of what is known as clause 31a into military contracts. At the present juncture, when Australia, as a part of the Empire, is engaged in a struggle which will yet be very severe, it is, in my opinion, unpatriotic to introduce a clause into military contracts which provides for a political spy-

Senator SHANNON
- In my view, it is not only unpatriotic, hut cowardly, on the part of the Government to introduce such a condition into military contracts at the present juncture, under cover of the patriotism of the manufacturers of Australia.

Senator Russell
- The members of the South Australian Association were called blacklegs by the New South Wales Association because they yielded to the condition, and the South Australian Association has withdrawn from the Federal Association for that reason. The commercial men of South Australia are good unionists.

Senator SHANNON
- That does not describe the position at all. The honorable senator is drawing a red herring across the trail. I personally admire the men who say that they will not have this system of espionage. If the condition be found to militate against the supply of military requirements, the Government will be well advised to hold their hands before enforcing it. It is not a question of preference to unionists. Clause 31a of the military contracts to which I refer makes provision, in my opinion, for a political spy. Senator Russell says that it makes provision for a protector of the weak. Honorable senators may describe the officer as they please, but he is to be permitted to go into factories at certain hours and make certain inquiries, and such an officer is taken exception to by every manufacturer in Australia.

Senator SHANNON
- I have not spoken to a single manufacturer upon the subject, but I repeat my statement that at the present juncture, under cover of the patriotism of the manufacturers of Australia, it is most unpatriotic on the part of the Government to enforce such a condition upon contractors.

Senator SHANNON
- The important question for the Honorary Minister to consider is whether the enforcement of such a condition is going to prevent or delay the manufacture of military supplies. If it has that effect the sooner clause 31a is removed from military contract during the Avar, the better it will be for the occupants of the Treasury benches.

Senator Russell
- The officer is not to be allowed to enter a factory during working hours, but only during meal hours, and his visits will not interfere with the work of the factory in any shape or form. I advise the honorable senator to read the clause to which he objects.

Senator SHANNON
- I know that very great exception is taken to it. I wish to say a word upon the proposed strategic railway. I have already commended Senator Newland for what he had to say on the subject. The honorable senator directed special attention to the fact that the Northern Territory is now Federal territory, and is not the property of any one State. If I can assist him in bringing home that fact to the minds of honorable senators, I .shall be satisfied with what I have had to say this afternoon. Are we doing all that we can to develop that Federal territory?

Senator Russell
- Will the honorable senator not accept military advice as to the necessity for railways at the present stage ?

Senator de Largie
- No ; the honorable senator can only see a railway that will be of advantage to the State of South Australia.

Senator SHANNON
- Here is another of these parochial parasites. The honorable senator cannot see beyond his own nose. He can see only Western Australia, which, I admit, is a big part of the Southern Hemisphere.

Senator de Largie
- We do not want any railways, strategic or otherwise, in Western Australia.

Senator NEWLANDS (SOUTH AUSTRALIA)
- Western Australia desires that the Federal Government shall widen the gauge of the existing railway between Kalgoorlie and Fremantle.

Senator SHANNON
- I am not speaking for South Australia, but because the Northern Territory was originally held by South Australia, men like Senator de Largie say that I am speaking for South Australia. Senator Newland tried to disabuse the minds of these senators of such a fallacy. I am not speaking for South Australia, but in support of the development of a Territory of the Commonwealth.

Senator Russell
- The honorable senator appealed to patriotism in connexion with the trade unions, and I ask him whether, if a military authority advised that a strategic railway is essential, he would not put it before the South Australian railway.

Senator SHANNON
- Is there any possible chance of the proposed strategic railway being constructed before the termin ation of the war.?

Senator SHANNON
- Senator de Largie seems a little afraid, and I can give him some consolation by assuring him that the enemy is not going to come to Australia. He has been kept back from Calais, and will be kept out of Australia. There are certain forces that may be let loose to prevent any Germans coming to Australia. At any rate, the proposed strategic railway would not help us in the present crisis.

Senator de Largie
- The longer the start is delayed, the longer it will take to finish the railway.

Senator SHANNON
- It is far better for Australia to put down lines of railway that will serve a real strategic purpose, and will at the same time develop territory belonging to the Commonwealth.

Senator SHANNON
- Is the Honorary Minister prepared to say that military advisers contend that the proposed strategic railway would be of any assist ance to us in the present crisis? It is not often that I make a prophecy, but I am prepared to-day to take up the role of a prophet, and I am pleased to say that the best authorities in the Old Country agree with me in the statement that when the present war is finished there will be no more German domination. The people of the great Empire of which we are proud to form a part are determined that when this war is finished there shall never be another such war as long as time shall last.

Senator SHANNON
- The Empire has put its hand to the plough, and is determined to break the domination of the powerful and aggressive nation that has been preparing for the present war for so long.

Senator Russell
- How will a strategic railway to Oodnadatta help in the present crisis? What would be the use of an army at the Macdonnell Ranges?

Senator SHANNON
- The proposed strategic railway cannot be constructed in a day or in a month, and the present crisis will have passed long before it can be built. The prophecy I am prepared to make is that there will not be another great war for the next 100 years. The present war is a battle of Armageddon, and it behoves the people of this great Empire to see that it is fought to a finish. That being so, the strategic railway will not be required for another 100 years.

Senator Russell
- Then we shall not want a strategic railway to the Macdonnell Ranges?

Senator SHANNON
- I am not advocating that as a strategic railway, but as a railway to develop the country.

Senator Russell
- It will not assist us in the present crisis to spend a few millions on a railway for South Australia.

Senator SHANNON
- I am not speaking for South Australia, but for the development of a Territory which has become . Commonwealth property.

Senator NEWLANDS (SOUTH AUSTRALIA)
- When we come to deal with the locking of the River Murray, we shall have Victorian senators with all their war-paint on.

No honorable senator will charge Senator Newland with speaking for South Australia in what he had to say on this subject the other day. Honorable senators are aware, as Senator O'Loghlin has reminded us, that an agreement was made, when the Northern Territory was handed over to the Commonwealth, that it should be linked up with the southern railway system.

Senator Russell
- Is the honorable senator, as a patriot, prepared to enforce compliance with that agreement at the present time?

Senator SHANNON
- I am not speaking on patriotic lines now, but urging the development of a Territory belonging to the Commonwealth. The Honorary Minister has not sufficient brains to be able to determine when I am speaking upon a Federal matter and when I am speaking on a patriotic matter.

Senator Russell
- I understood that when the honorable senator was referring to clause 31a of the military contracts, he was making a patriotic address.

Senator SHANNON
- I said that the proposed strategic line would not be required for the next 100 years, and I have finished with that matter. I wish now to impress upon honorable senators the solemn obligation resting upon this Parliament. We accepted responsibility for the control of a very large area of country, which is at present being allowed to lie idle because nothing is being done to develop it. South Australia had to bear the burden of the Northern Territory for fifty .years, and it was known as a "white elephant." Does the Federal Parliament want to become a by -word and reproach bv letting it be known that they could do nothing more with this Territory than let it become the " white elephant" of Australia? If honorable senators do not want that stigma to be cast on this Parliament, I ask them to rise above this pettifogging parochialism of Western Australia, or South Australia, or any other Australia, and to realize that we are Australians first. This Territory can certainly not be developed within its own borders. As was pointed out the other day, the best way to develop it is to carry out the contract under which it was handed over to the Commonwealth, and link "p the north and south immedi ately by a line of railway. It is objected that the line so far constructed does not pav, but that is no wonder when we remember that it ends in probably one of the driest spots on the face of the earth. Oodnadatta does not enjoy a rainfall of 5 inches per annum. Honorable senators who do not want to carry the line any further because it does not pay. ending where it does, are like a man who built a bridge into the middle of the stream dividing his land, and then said it was no use going any further with it because he did not get any produce from the other side. If the line is continued northward at least as far as the Macdonnell Ranges, I indorse Senator Newland's opinion that it will become a paying concern and help us to develop the Territory, of which we are the custodians.

Senator Russell
- Where would you get the money from to build this railway ?

Senator SHANNON
- Where are the Government going to get the money from to build the strategic railway?

Senator SHANNON
- The north-south line could be made not only a developmental' but also a strategic line. If we carry out the north-south and eastwest lines we shall have two railways which will be at once developmental and strategic.

Senator de Largie
- The north-south railway would give the enemy a very good chance to come down.

Senator SHANNON
- Then the honorable senator thinks the strategic railway would not do so? According to the honorable senator, the back-bone railway from north to south and the rib railway from east. to west would facilitate the approach of an enemy; but the suggested strategic line from Port Augusta to Brisbane would be one on which only our own forces could travel, and which the enemy could not use at all. If that is the honorable senator's argument, it is a very silly state of mind for him to get into, and the sooner he disabuses himself of it the better it will be for him and Australia generally. I want to emphasize the fact that the Commonwealth accepted the responsibility for the Territory, and must not shirk it. Having accepted it, it is our bounden duty to do something with it or get rid of it. If the Commonwealth regrets the bargain it made with South

Australia, it had better ask South Australia to relieve it of the responsibility, and let the Territory revert to South Australia. If we are not prepared to do that, we must discharge the responsibility that rests on our shoulders. We cannot evade it. We must do what is best in the interests of the Territory, and the best way to develop it is immediately to link it up with the existing line running northward

Senator Lt.-ColonelO'LOGHLIN (South Australia) [4.40]. - I shall continue where my colleague left off with reference to the Northern Territory and the north-south railway. As he and Senator Newland have well put it, South Australia is not asking any favour in this matter. An agreement in black and white was entered into by the Commonwealth and South Australia with regard to the Northern Territory. In the four corners of that agreement a distinct arrangement was made that a railway line should be constructed by the Commonwealth connecting Oodnadatta with the existing line in the Territory, which at that time ran to Pine Creek.

Senator Lt Colonel O'LOGHLIN
.- I do not suggest that at the present juncture, when all our resources are taken up by the war, we should enter immediately into any undertaking of the sort. But the first Commonwealth work of any importance that should be undertaken is the carrying out of the agreement to build the line from Oodnadatta to Pine Creek. I do not know sufficient about the proposal of the Government to build a strategic railway from Port Augusta to Brisbane to offer any comment with regard to it, but the north-south railway offers many advantages from a strategic point of view also. The Northern Territory is about the weakest point on the Australian coast so far as concerns the danger of invasion. There are no defences on our north coast, and we ought to take the earliest opportunity of establishing such means of communication as would enable us to send troops to defend it. The troops that would come from Western Australia, Tasmania, South Australia, and the greater part of Victoria would find the north-south line the quickest and most direct means of transportation to the Northern Territory, and when the line, which I believe is authorized, if not al ready begun, connecting Broken Hill with the main New South Wales railway system, is finished, which will probably be within not more than two or three years at the outside, the north-south line will be the easiest and quickest route by which to transfer New South Wales troops to Darwin. From "a strategic point of view, therefore, the north-south line is the best proposition yet put forward. It will also, as Senator Shannon points out, be a very useful developmental line. If the Territory had not been transferred to the Commonwealth three or four years ago, I believe that a railway from Oodnadatta to the Macdonnell Ranges would be now in course of construction, if not already completed, by South Australia itself, because the Government of South Australia were so seized of the advantages offered by the line, and the absurdity of the present desert terminus, that they would have carried out the work themselves. However, the agreement exists, and ought honorably to be carried out. I am surprised that some of our Western Australian friends, who have got their own railway-

Senator Lt Colonel O'LOGHLIN
.- We helped you to get it. and the understanding was that the two railways were part of one great scheme which the Commonwealth was going to undertake. As Senator de Largie knows, and as was well known to Sir John Forrest - who took what I must call an underhand course in opening up communication with Queensland behind the back of the member of his own Ministry who was responsible for the Northern Territory - when he was engineering and negotiating for the eastwest railway, he was very glad to get the assistance of South Australians, and we understood that we would have the same loyal assistance from the Western Australians in carrying out the other part of the contract.

Senator Lt Colonel O'LOGHLIN
.- I will not say there was any engineering so far as the support given by South Australia was concerned. South Australian members have always loyally supported it. Twenty- five years ago I was a member of a Ministry that entered into an agreement with Western Australia on the subject. Th9 two Governments were so satisfied of the necessity of constructing the east- west line, that they were prepared to agree to construct it themselves. It was only because Federation supervened soon after that the project was postponed, and the work regarded as a national undertaking. All we ask is that the agreement shall be carried out by both parties to it.

Senator Lt Colonel O'LOGHLIN
.- It will develop not any particular State but Commonwealth territory. I congratulate the Government on the very satisfactory position in which the Commonwealth finds itself in these times of extreme difficulty. I was very pleased to see the financial statement laid before another place by the Prime Minister, because I must admit that there was very great anxiety as to our financial position in view of the extreme stringency of the money market, and the situation created by the war. Before we adjourned over Christmas we were assured by Ministers that financial arrangements were completed to tide us over to the end of the financial year - 30th June next. We were aware that during the recess the sending away of our contingents, and making provision for additional contingents would involve a considerable increase of expenditure, and that some of the sources from which additional revenue was expected, particularly the probate duties and the land tax, had not come up to expectations. As a matter of fact, we have not received a penny from probate duties, nor are we likely to do so by the end of the financial year. I think the Treasurer could not have looked into that matter as carefully as we had a right to expect, or his estimate would not be so woefully astray.

Senator Lt.-ColonelO'LOGHLIN.I. think he calculated on the average amounts coming in from death duties extending over the Commonwealth, without considering that it would take some time before the estates would be realized and the. amounts made available. It is, however, satisfactory to know that the deficiency has occurred through our old pioneers being so tough that they are still outlasting the strenuous times through which we are passing, and living longer than the average. That is not a matter of which we have any reason to complain. Considerable anxiety was then felt as to how we would finance matters, seeing that the Estimates had not come up to expectations, and that we were obliged to incur a huge expenditure on account of the despatch and maintenance of the Australian troops who are now fighting in the cause of civilization at the front. I am very pleased to learn from the Ministerial statement that a further arrangement has been made which will dispel all cause for anxiety in this connexion, not only to the end of the financial, but to the end of the calendar, year. Under the arrangement which has been completed, the Commonwealth is to obtain a further loan of £6,500,000 from the Imperial Government for war purposes, and £3,500,000 to enable us to carry out public works which we have already undertaken. That is a very satisfactory statement to place before us. From the Budget delivered by the Prime Minister, prior to the adjournment of this Parliament in December last, I gathered that an arrangement had been concluded with the Imperial authorities for financing the States in the matter of their public works, and also for financing the Commonwealth in its war expenditure. We were expressly told that £18,000,000 was to be provided by the Imperial Government specifically for war purposes, and that another £18,000,000 was to be forthcoming to enable the wheels of industry to be kept going, and to permit of the States carrying on their public works. This course was rendered absolutely necessary by reason of the fact that it was impossible for the States to raise money on the London market at anything like the ordinary rate of interest. The position was made absolutely clear - so clear as to leave no room for misconception. Much to my surprise, however, I find that no less a person than the exPremier and Treasurer of South Australia has publicly stated within the past few days that the money which has been made available to finance the States is not being raised in the Commonwealth, but comes from the Imperial Government, and that the Commonwealth is merely an intermediary in the matter. Had the statement been made by an irresponsible person, I would not have taken any notice of it. But, seeing that it emanates from

Mr. Peake,who was Premier and Treasurer of South Australia at the time this financial arrangement was completed, it seems to me that it merits serious attention. That gentleman stated-

One of the fairy tales told by the Socialists during the recent campaign was that Mr. Fisher had financed the States by that £18,000,000 which was distributed about six months ago.

As a matter of fact, it was not distributed six months ago, but is in course of distribution now. But that is not material -

That, however, was not the case. The £18,000,000 were loaned to the States by the Home Government, and the Commonwealth was nothing more than an intermediary. It is British gold, and not Commonwealth paper, which we now use in order to carry on our works policy.

After reading that statement I took the trouble to write a letter to the press pointing out what was the real position, and buttressing my remarks with quotations from the Budget statement of the Prime Minister. But, notwithstanding my letter, Mr. Peake adheres to his position, and in a long communication published in the press has re-afiirmed that the £18,000,000 which the States are using is being advanced by the Imperial authorities. He even goes so far as to insinuate that there is only one sum of £18,000,000 being advanced altogether, and that the impression to the contrary is the result of a little bit of faking on Mr. Fisher's part. In these circumstances I would like the Minister of Defence to make a definite pronouncement on the matter. I ask him to say in his reply whether the Imperial Government are supplying the sum of £18,000,000 which is being used by the States for public works purposes, and whether the Commonwealth is merely an intermediary in the matter, or whether that amount really represents a product of the Commonwealth note issue ? In my letter to the press I distinctly said that the States were being financed with the aid of what have been termed " Fisher's flimsies." During the course of this debate an attempt has been made to show that the commandeering of wheat in New South Wales has had the effect of robbing the farmers. If the position in Australia was that the majority of the farmers were sellers of wheat and fodder, instead of being buyers, there might be some justification for the statement that they were being robbed. But I venture to say that for every one of the few fortunate farmers who are in a position to sell wheat and hay there are three who are compelled to buy those commodities.

Senator O'LOGHLIN (SOUTH AUSTRALIA)
-Colonel O'LOGHLIN.- Exactly. So that, although as the result of the seizure of wheat in New South Wales, and of its sale at a fair price, a little hardship may be imposed on the few farmers who are in a position to speculate, it is incontestable that a great benefit is conferred upon the large majority who have to buy both wheat and fodder.

Senator Shannon
- Is it not the honorable senator's policy that a man should be entitled to the result of his labour?

Senator Lt.-ColonelO'LOGHLIN.Yes. A man is entitled to a fair thing. But I am considering the interests of the great majority of farmers rather than those of a few who desire to make a good thing out of the misfortune of their fellows. In the British Dominions, and throughout the States, it has been recognised by Labour Governments that some action was necessary to prevent the cornering of essential commodities at the present juncture. The United Kingdom is now being run as a great Socialistic institution.

Senator Bakhap
- The Imperial authorities interfered in the case of sugar to the detriment of the public.

Senator Lt Colonel O'LOGHLIN
.-I repeat that the United Kingdom is now being run as a great Socialistic institution. The Imperial authorities have guaranteed the Bank of England in the issue of £100,000,000 worth of notes, they have also guaranteed the various discounting houses in connexion with bills drawn on Germany and Austria, some of which will never' be paid.

Senator de Largie
- Now is the proper time for our opponents to say we are all Socialists.

Senator Lt.-ColonelO'LOGHLIN.As a matter of fact, it is estimated that £150,000,000 will be lost by the Imperial authorities in connexion with guarantees given by them for the discounting of valueless paper. The British taxpayer will have to pay it. In regard to the Commonwealth taking over the products of factories, I would point out that the British Government have not only taken possession of most factories in the Old

Country, but they have appointed a Parliamentary Commission to see that proper rules are observed in connexion with their working, and that the interests alike of employes and consumers are protected. Clause 31a of our military contracts merely provides for what has been in existence in nearly all the big factories in South Australia for years. There are very few factory owners in that State who refuse the right of entry to union delegates for the purpose of interviewing the men during meal hours.

Senator Lt Colonel O'LOGHLIN
- If a factory owner is to be given to understand that he has bought his employes, body and soul, even outside working hours, I say unhesitatingly that that employe is an absolute slave. One objection urged against this provision when it was first opposed was that there might be some trade secrets in connexion with the manufacture of any particular commodity, and that if a union delegate were admitted to a factory he might thus learn something which would be of advantage to a rival firm. I understand that under regulation 31a delegates are prevented from obtaining such information.

Senator Pearce
- They are only allowed to visit the portion of the factory where the employes are having their meals.

Senator Lt.-ColonelO'LOGHLIN.If this regulation were not in force, and the representative of a union wished, during meal hours, to interview unionists engaged in any factory, the latter would merely be subjected to the inconvenience of going into the public streets to talk with their union delegates. What would be gained by that procedure?

Senator Shannon
- What is the object of these delegates in visiting factories at all?

Senator Lt Colonel O'LOGHLIN
.- As we recognise unionism, and as most factory owners affirm that they have nothing against unionism, we should offer facilities for union officials to communicate with those whom they represent. That is the object, and it seems to me to be a very fair one. Very often it would prevent trouble instead of, as our opponents seem to imagine, causing it. The honorable senator referred to the duties on bags and machinery. Although I under stand that the duty on bags is imposed with the view to encourage British manufacture - in other words, to promote trade within the Empire - still I shall want to hear much stronger reasons than I have heard before I shall be prepared to support the duty. With regard to machinery, when the duty was imposed there was an agreement placed in the Act that if th-i manufacturers of machines, particularly agricultural machines, had a Tariff wall erected by Parliament to secure to them the home market, they would have to fulfil certain conditions. They were to undertake, not only that the prices of machines to the farmers should not be increased, but that they should be reduced on a sliding scale over a period of two or three years. Further, the manufacturers were required to agree that the operatives in the factories should receive a fair wage, and enjoy fair conditions. I was a member of the Senate when the policy of new Protection was introduced. Manufacturers came to this building, and said to members of Parliament, " Give us the home market; give us Protection which will enable us to get the total trade, and then we can afford to fulfil the conditions proposed; we can afford to reduce the prices of machines, and we are quite prepared to give standard wages and conditions." The manufacturers got the Protection they desired on those conditions, but immediately afterwards the leading manufacturer, Mr. McKay, of the Sunshine Harvester Works, annealed to the High Court on the constitutionality of the legislation, and the appeal was upheld.

Senator Lt.-ColonelO'LOGHLIN.Yes. The position to-day is that, instead of the prices for machinery being reduced on a scale of £5 or £10 a year over a period, they have gone up on about the same scale until they are about 20 per cent, higher now than then. I put it to Senator Shannon that one of the things we want to secure at the next referendum is the power to introduce the new Protection, to see that not only shall the manufacturers be protected, but that the Protection shall extend to the consumer and the workman. Will the honorable senator help us in that direction ?

Senator Shannon
- Do not ask for more power than you want, and you will get it.

Senator Lt Colonel O'LOGHLIN
- If the honorable senator is sincere in his claim to promote the interests of the farmers, he will help us to secure that power from the electors, so that the manufacturers, notwithstanding the duty, shall be content with the increased Protection which will be given to them, and shall not raise the prices of their articles to the farmers, but rather shall reduce them. The policy of the Labour party is not to put fresh burdens on the farmers, but rather to relieve them of burdens which thoy already have. In Western Australia the Labour Government had to step in and start an implement factory, and I had the pleasure of being present afc the official opening last year. The factory, I may say, was in nae previously, because implements had been produced for the consumers, but it was found necessary to enlarge the works, and put up new buildings. I saw a good many farmers at the official opening, and the result of this enterprise by the State is that, whereas the price of harvesters used to range from £90 to £100, the State factory, so the farmers assured me, has been turning out a better article at a cost of 25 per cent. less.

Senator Shannon
- The same sized machine ? That is not the evidence in Western Australia.

Senator Lt Colonel O'LOGHLIN
-I understand that, as a result of the Government's competition, the other manufacturers of implements have had to lower their prices; but whom have, the farmers to thank for the reduction? Not the private manufacturers, but Government enterprise, which, I am happy to say, brought down the price of farming implements to a more reasonable figure, I trust that the Minister, in his reply, will deal with the statement of the late Premier of South Australia. I again congratulate the Government on the very satisfactory position we are in, considering the difficulties with which we have to contend.